Hotbit suspends operations following legal investigations. After Voyager Digital, here is another player in the cryptocurrency sector which finds itself in difficulty. Hotbit Crypto Exchange has just blocked transactions on its platform following a subpoena from several of its managers.
This is the news that just fell a few hours ago. This situation would be the consequence of the criminal activities of one of the employees of the structure.
Currently, under investigation by the authorities, Hotbit has seen its funds frozen. This leads to the suspension of the activities of the platform.
Hotbit is not involved in this criminal project
This is what emerges from the official press release sent by the platform to its users a few minutes ago. In this press release, they explain the reasons for the freezing of funds and the suspension of transactions.
They take the opportunity to proclaim their innocence. In this press release, Hotbit, therefore, declares that it is not involved in the project under investigation and reassures users.
They claim to be working with the authorities to make the platform's assets available again.
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Who is the cause of this investigation?
Also in the press release, we learn that the fraudulent project which causes the investigation of the authorities is the work of a former employee of the management.
The latter would have left the company last April. This project dates from last year and was considered by Hotbit to be against its internal policies.
Several questions, therefore, arise: who is the employee in question? How did he manage to execute this project if it was really rejected by Hotbit? What is the extent of the damage?
All these questions which turn out to be legitimate have no answer at the moment. The press release remains elusive and no information is currently revealed.
However, Hotbit does provide guidance as to its users' assets during the suspension.
How will Hotbit's customer assets be managed?
Hotbit reassures its customers about the security of assets. Although deposits, withdrawals, and all other transactions are suspended, the platform has taken measures to secure the investments of these investments. They are summarized in four measures which are revealed as follows:
- Open and not yet filled orders will simply be canceled. This is to prevent possible losses due to market fluctuations.
- Leveraged ETF positions will be forcibly liquidated before 00:00 UTC on this day, August 10, 2022. This is to prevent potential losses.
- Investment products will be normally distributed.
- A compensation plan will be implemented and details will be released later.
These measures are intended to reassure Hotbit customers. However, no information is given as to the date of the resumption of the activities of the platform.
This is likely to sow doubt among users. This state of affairs is reminiscent of the suspension of activities in April 2021 following a cyberattack and a data leak of more than 2 million users.
Is there a connection between the two events? Nothing at this time allows us to say it. It would be pure speculation to say that the criminal scheme in question was last year's cyberattack.
Is this the beginning of the end for Hotbit?
Hotbit is Asia's leading cryptocurrency exchange. It has a native crypto the HTB which has a market capitalization of over 15 million.
It goes without saying that this event and the investigations to which it is subject will impact the course of the HTB. User confidence is also likely to plummet. Without being a bad omen, this new suspension of activity may be the start of a descent into hell for the Asian platform.
A few minutes after the announcement of the suspension of activities, the price of the HTB literally collapsed, before gradually rising.
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